How to solve the EU VAT MOSS mess?

Here’s a simple solution if you sell software or are a SAAS:  use a reseller.  It works like this:  you do your business as usual, but once a customer wants to buy, you shuttle the customer to a website of your reseller, where the customers pays for the software or service.  In legal terms the customer is buying from the

reseller, who in turn buys the software from you.  This shields you from EU #VATMOSS and sales tax obligations, as the reseller has to handle this.  Your company is not selling any more to consumers in the EU, but instead selling to a company (the reseller).  This construct shields your company from VAT and makes accounting simpler, as you have only one customer in the EU (the reseller).  Obviously, the resellers charge for this service.  Your advantage is much simpler accounting and less accounting fees.  In practice this reseller setup is technically similar to using Stripe or PayPal, when you use their service and servers to do a payment transaction.  The fees the resellers ask are higher than Stripe or PayPal, but the resellers take on fraud prevention, VAT handling and payment charges.  For customers outside of the EU you can still use Stripe and PayPal (I recently heard that Japan is moving to -or having- a similar VAT system than the EU).

Here’s a list of resellers (I didn’t try them, so I can’t give a recommendation):

• http://www.avangate.com
• http://paddle.com
• http://fastspring.com
• http://www.mycommerce.com

Be aware that using them might have implications with regard to EU privacy protection laws (this is also the case when using stripe).

The invoice solution

There’s also another solution:  you can use an invoice service who handles the EU VAT calculations for you:  https://www.quaderno.io/. Then you can combine quaderno with the VAT Mini One Stop Shop (the link is to the UK, other EU countries also have an equivalent service).  This is cheaper than a reseller in terms of payment fees, but requires more accounting (and accounting fees).

[UPDATE]:  The EU may (or may not) change their VAT rules in 2018.  This could be a simplification for smaller business.  SendOwl has written an overview about the proposed changes: https://www.sendowl.com/blog/eu-vat-update-dec-2016.html

In the 4-Hour Work Week an “income autopilot” is extensively described.  Here’s the short and to the point version:

• Select an income source that’s easily and cheaply tested (< 500$)
• Automation is possible within 4 weeks
• No more than 1 day a week management
• Control distribution
• Decide on distribution before committing to product
• Pick and affordably reached niche market
• Brainstorm products with the following characteristics:
  1. Main benefit in 1 sentence
  2. Price: 50 – 200$
  3. No more than a couple of weeks to produce
  4. Explainable in good online FAQ
• Create a product option, but don’t commit yet!
• Think of an information product
• Micro test your products
• Test result: Divest or invest
• MBA – Management By Absence
  1. Remove yourself from the equation
  2. Contact outsourcing companies vs. freelancers
  3. Ensure the outsourcers communicate with each other and solve problems themselves
  4. Offer few options
  5. Fire bad customers
  6. Offer a fantastic guarantee

That’s it.